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Aviation Sector in India

December, 2012


India is the ninth largest aviation market in the world, according to RNCOS research report, titled "Indian Aerospace Industry Analysis". It is anticipated that the civil aviation market will register more than 16 per cent compound annual growth rate (CAGR) during 2010-2013 on back of strong market fundamentals.

The rapidly expanding aviation sector in India handles about 2.5 billion passengers across the world in a year; moves 45 million tonnes (MT) of cargo through 920 airlines, using 4,200 airports and deploying 27,000 aircraft. Currently, 87 foreign airlines fly to and from India and five Indian carriers fly to and fro from 40 countries. India is expected to be amongst the top five nations in the world in the next 10 years. An efficient civil aviation sector is important for India as it is inter-linked with other sectors in the economy and generates income and employment through global commerce and tourism, as per a National Council of Applied Economic Research (NCAER) study titled 'Emirates in India - Assessment of Economic Impact and Regional Benefits'.

Airport infrastructure in India is witnessing improvisation and expansion on a massive scale, with the Government avidly supporting private participants. The need for airport infrastructure in India has increased considerably. In order to ramp up airport infrastructure, the Government has unveiled reforms to facilitate investment in this segment. The investment in Indian airport infrastructure market, especially in the greenfield projects is expected to increase.

Market Size

The domestic airlines carried 438.4 million passengers during January -September 2012 (first three quarters of calendar year), according to data released by the Directorate General Civil Aviation (DGCA).

The air transport (including air freight) in India has attracted foreign direct investment (FDI) worth US$ 446 million from April 2000 to September 2012, as per data released by Department of Industrial Policy and Promotion (DIPP).

Market Players

  • SpiceJet Ltd has announced the launch of two new international flights from Kochi, Kerala to Male and Dubai. The airline has deployed the Bombardier Q400 aircraft, with a capacity of 78 passengers, in the Kochi-Male route
  • IBS Software has entered into a contract with Lufthansa Cargo AG for the implementation of its air cargo solution - iCargo. The deal worth Rs 700 crore (US$ 127.50 million) has three segments and IBS Software has major share of the contract

Aerospace on a High

  • India and New Zealand have signed the "Arrangement for Cooperation on Civil Aviation". Under the arrangement, the two countries will promote and support the development of training and technical cooperation in the field of civil aviation
  • GVK Power and Infrastructure Ltd has signed an operations and management contract with the Airports Authority of Indonesia (Angkasa Pura Airports). The scope of the contract includes managing non-aeronautical commercial operations at both the existing terminals and the new international terminal of Indonesia's second busiest Bali (Denpasar) international airport
  • Maldivian Airlines has expanded its flight network by connecting Chennai, Mumbai and Dhaka with Male, the capital city of Maldives. "India is our focus market, as it has a great potential," said Mr Bandhu Ibrahim Saleem, Chairman, Maldivian Airlines
  • India will be the fourth biggest market in terms of value for all new aircraft deliveries after China, the US and the UAE during the next 20 years, according to aircraft maker Airbus